Flattops Water deal finds buyers, awaits claiming water rights

Buyers in Eagle County are in line for $5 million of Routt County water, but the project that would provide it has yet to be approved and is facing concerns from water users and officials.

The Flattops Water Co. is working out the details of a deal that would send 1,250 acre-feet of water to the Colorado River Basin. The water comes from return flows left over from irrigation on a few thousand acres of ranchland near Toponas.

The deal is being watched by

water experts because it involves a transbasin diversion of Yampa River water to users in the Colorado River Basin.

Because of the lay of the Toponas ranchland involved, that transbasin diversion has long happened through irrigation, the company asserts, saying now it simply wants to claim and sell the return-flow rights.

Water users on the Yampa River side fear more water could be diverted to the Colorado River than happens through irrigation. They also fear the project could set an unwanted precedent.

Water users on the Colorado River side fear faulty accounting could mean nonexistent water is sold and bought, leaving other water users high and dry.

How the project works

The water deal takes advantage of a unique land situation and a historical irrigation pattern.

Bear Valley, where the Yampa River starts, is the origin of the project.

Flattops Water owns storage and direct-flow water rights in the Yampa River drainage. The company has 20 members across the nation and was formed to file for return flow rights, said Kirk Shiner, a Toponas rancher and local member of the company.

Much of its water is diverted downstream from Yamcola Reservoir by the Stillwater Ditch, according to a water engineering report.

The ditch, which carries water from nearby reservoirs and the Bear River, climbs for about 18 miles out of the valley and onto Five Pine Mesa, where Shiner has grown hay and grazed cattle since 1985. Water from the ditch and other sources has been used to irrigate Five Pine Mesa for more than 70 years, said water attorney Glenn Porzak, who represents Flattops Water and plan co-sponsor, the Upper Eagle Regional Water Authority.

When the water is applied at the northern portion of the mesa, leftovers end up back in the Yampa River, where it is available to downstream users.

But when the water is applied to the southern portion of the mesa, leftovers seep through the ground and within a couple of months, feed into Egeria and Smith creeks or Wohler Gulch, which drain into the Colorado River.

Since the return flows end up in another basin, they are especially valuable: They are senior to all other water rights, and can be used and reused to extinction.

The engineering report states that almost 1,400 acre-feet historically has been transported to the Colorado River basin. Flattops Water wants to claim and then sell most of that water.

In wet years, the water would be used to irrigate fields, and the return flows would collect in the Colorado-side creeks. But in dry years, or to maximize the yield of imported water, water will not be used for irrigation, and instead will go straight to storage and to the end-users in the Colorado River drainage, the report states.

At $4,250 an acre-foot, the deal could bring in $5.3 million if it is approved, Porzak said.

Eagle Park Reservoir, a 2,000-acre-foot reservoir at the headwaters of the Eagle River, along with the Eagle River Water and Sanitation District, which serves Vail, filed in December to purchase the Flattops Water rights.

Conservancy set precedent

A few years ago in a similar scenario, the Upper Yampa Water Conservancy District asked for return-flow rights, District Attorney Bob Weiss said. Of the thousands of acre-feet in Yamcolo Reservoir that the district sells to area ranchers, some ends up in the Colorado River because of irrigation practices.

In 2001, the district was decreed rights to 141 acre-feet in return flows per year. Now, district officials are looking into options to sell that water, Weiss said.

But selling water to another basin is by no means a goal of the district, he said.

"The Upper Yampa Water District would never do anything to put more water (in) the Colorado River drainage because that's not something that's part of our mission," Weiss said. "We're not in the business of exporting water, that's not water we're about."

Instead, the district agreed to sell return flows only after the water is first used for irrigation, he said.

Another difference in the Flattops Water project is that it allows water not to be used for irrigation in very dry years. In most years, fields would be irrigated. But maybe once every 20 years, the water will go straight to the municipalities, Porzak said.

In very dry years, water is simply worth more than what it can grow, he said.

Yampa-side concerns

Of 17 entities that filed in opposition to the project, there were three cities and towns, two energy companies, and three individuals, along with several water organizations and companies.

For users in the Yampa River basin, a major concern is that Flattops Water could increase the percentage of its water that goes to the Colorado River, said Alan Martellaro, engineer for Division 5, which covers the Colorado River Basin.

"So long as what they're proposing to do doesn't change the amount going out, then we become more comfortable with this," Weiss said. "If it increases what is lost to the Yampa drainage, then we have more difficulties with it."

Work on getting those historical numbers is under way, he said.

There seems to be a gradual change in the irrigation patterns on Flattops Water lands, according to a preliminary memo from consultant George Fosha on behalf of the Upper Yampa Water Conservancy District.

In recent years, a larger percentage of the total water the company owns has been diverted to the Colorado drainage, the memo states.

Other concerns include the practice of not irrigating during dry years and whether, at 360 acre-feet, the project overestimates seepage loss through ditches.

Some South Routt residents are convinced that other individuals would have filed in opposition if they had known more about the deal or how to oppose it, Yampa resident and historian Paul Bonnifield said.

To Bonnifield, who did not file in opposition, the project represents a breach of trust, as the larger reservoirs in Bear Valley were built with public money to supply the needs of Yampa River users, not to allow for diversions to Colorado River towns.

Although the Yampa River is under-appropriated, and by some estimates only 10 percent of the water is used before eventually flowing out to Utah, Bonnifield said that diverting water to the Colorado eventually could impact Yampa River users.

Routt County commissioners, who also did not file in opposition, said they were worried about setting a precedent that could leave county residents, especially those in South Routt, without the water they need.

"We feel there is going to be growth, and we'll be sitting here with the proverbial thumb in our ear and there won't be water for growth," Routt County Commissioner Doug Monger said.

Colorado-side concerns

On the Colorado River, accounting is the biggest concern. Users want to avoid faulty estimates of how much water seeps into the Colorado River because they worry that overestimates will lead to nonexistent water being bought and sold.

That is the chief concern of the state and division engineers, which filed opposition to the case, Martellaro said.

"Our concern is that we can identify the water," he said. "That we can measure it, that we know it's there and that it's physically entering."

Attorney Jeff Houpt represents Egeria Creek rancher Betsy Hatt, who filed in opposition of the project. Although Houpt said he could not comment on Hatt's concerns, he could describe general Colorado-side concerns.

One is that users who have relied on water coming down Egeria and Rock creeks into the Colorado, or even those who have more junior rights on the Colorado, will learn that water is claimed and can't be used.

A recent Supreme Court decision acknowledged that no matter how long water has been imported into a basin, the importers never give up their right to use the water to extinction, "a harsh result" for people who have used the water before it was claimed, Houpt said.

Houpt said other concerns include difficulties accounting for how water is used in places that once depended on handshakes between neighbors.

Growth in the Vail Valley and Eagle County has been staggering, Houpt said, and signals how valuable the water really is.

Almost finished

The project is well on its way, attorney Porzak said, and could wrap up in the next year.

"It's very much in the technical and engineering phase," Porzak said. "We have met with all of the parties and answered a lot of their questions."

If opposing parties are not content with Flattops Water's answers, the case could go to a water court for resolution, he said.

Shiner said that while many water deals end up drying ranches to supply thirsty cities, this one will not.

"We're going to continue to irrigate with it, or ranch with it, and that's the most important thing," Shiner said.